PHTM.L Regulatory News (PHTM)

19 Jan 2006 07:00

Photo-Me International PLC19 January 2006 PHOTO-ME INTERNATIONAL PLC Acquisition of Amusement and Gaming Machine Company PMI, the FTSE 250 digital imaging company, announces that it has acquired 60% ofDeith Group Limited, one of the UK's leading distributors and developers ofcoin-operated amusement and gaming machines. Deith, which is based in Reigate, Surrey, represents top global manufacturers,such as Electrocoin, Sega and Taito, and numerous others. Deith also developsdigital gaming machines through its Deith Gaming brand for the internationalcasino, licensed betting office, pub and arcade markets. Deith will benefit from new distribution channels through PMI's internationalgroup companies and from PMI's links with sub-contractors in China in terms ofenhanced development and substantial savings in the cost of manufacturedequipment. In the year ended 31 May 2005, Deith made an audited pre-tax profit of £935,000on a turnover of £11,546,000. Net assets at that date totalled £1,848,000. The total consideration comprises initial consideration of some £1.23m,comprising 1,038,961 PMI shares, with a current market value of some £0.98m, and£0.25m in cash, with up to a further £0.95m being paid in the form of LoanNotes, contingent on annual pre-tax profits for the three years (or, ifnecessary, four years) commencing 1 May 2006 averaging over £1m. There is a putand call arrangement over the remaining 40%, exercisable after eight years, innormal circumstances. The trading performance of Deith is weighted towards the first few months of thecalendar year. Its pre-tax profit target for the period from acquisition to 30April 2006, PMI's year end, is £0.5-0.6m. Leon Deith and Matthew Deith, who owned 95% of Deith and retain substantialshareholdings, remain as Joint Managing Directors and have entered into newservice contracts. Serge Crasnianski, PMI's CEO, stated "Deith, as a distributor of coin-operatedmachines in the amusement and gaming industries, will fit well alongside PMI'sactivity as a leading UK operator of coin-operated vending machines. It willalso continue PMI's policy to broaden its activities in the leisure sector,building upon 2005's two acquisitions which resulted in PMI being, by far, theUK market leader in the manufacture and operation of kiddie rides." Leon and Matthew Deith added, "We are delighted that Deith Group has become partof Photo-Me's wider, international business, with all that entails in terms ofopportunities for profitable growth." Notes for Editors: PMI's Vending business comprises the operation of photobooths and other vendingequipment. In the 12 months to 31 October 2005, the total number of PMI'sVending sites worldwide increased by approximately 6,000 (4,100 coin-operatedkiddie rides) to 33,000, including 20,400 photobooths. PMI's Manufacturing business principally comprises the manufacture, for sale, ofminilabs and wholesale labs, together with the manufacture, for both ownoperation and sale, of digital media kiosks and photobooths. Other than withwholesale labs, manufacture is effected primarily by sub-contractors in low costterritories. Enquiries: Photo-Me International 01372-453 399Vernon Sankey (Chairman)Serge Crasnianski (CEO) Bankside ConsultantsCharles Ponsonby 020-7367 8851 charles.ponsonby@bankside.com This information is provided by RNS The company news service from the London Stock Exchange